Schock Statement on Advancement of Job Creating Free Trade Agreements
Illinois Set to Benefit from Passage of Pending Trade Deals
Jul 8, 2011 -
Congressman Aaron Schock (R-IL) issued the following statement as Congress advances toward final passage of the three pending Free Trade Agreements with Colombia, Panama and South Korea. The Ways and Means committee concluded one of the finals steps toward a vote by Congress to approve the three pending free trade agreements:
“I am very pleased we are finalizing the vital work that is necessary for Congress to formally approve each trade agreement. The United States represents only 5 percent of the world’s population, so it only makes sense that we would want to expand the opportunities for businesses in the US to find ways to increase their productivity by selling their products to the other 95 percent of the world. These three pending agreements are a strong step forward to improving not only trade relations with these countries, but providing a much needed jolt to our economy.
“Each trade agreement will benefit my district, Illinois and our country in a variety of ways. In central Illinois where manufacturing and farming represent the largest percent of the local economy, these agreements, when passed, will be great news for farmers and manufacturers. I come from a district that is one of the 60 districts left in this country which is ag dominant and there is no industry in this country that benefits greater than agriculture from strong and vibrant trade throughout the world. Manufacturing exports total more than $1 trillion worth of exports in 2010. In Illinois, 145,000 jobs are supported by trade, and manufacturing consists of 95 percent of those jobs. For Central Illinois manufacturers, the expansion of the Panama Canal offers tremendous opportunities for U.S. companies to compete for business opportunities and the planned investment of $50 billion in infrastructure projects in Colombia is another example why we need to act quickly to approve these pending trade agreements. China just recently signed a Free Trade Agreement with Colombia which puts the U.S. at a very heavy competitive disadvantage and will continue to do so until we act.
“If you believe in America’s work ethic and ingenuity, then you would believe that we need to get a free trade agreement with as many countries as possible. I fought hard to get on the Ways and Means committee precisely to advocate for the passage of the pending trade deals because of the impact each deal with have in Illinois; so finalizing these trade pacts continues to be a top priority for me. Not passing these agreements will represent a lost opportunity to keep and increase our market share throughout Asia and Latin America and will further harm U.S. workers, farmer, and businesses by denying U.S. job creators the chance to do what they do best - create jobs at home and help grow our economy.”
Positive Impact of Free Trade Agreements in Illinois
The American Farm Bureau Federation estimates that the three agreements in total are expected to increase direct exports from Illinois alone by $90.5 million per year. They go on to estimate that the increased marketing opportunities for Illinois’s farmers will add nearly 815 jobs to the Illinois economy. According to the U.S. Business Roundtable, Illinois ranks sixth among all states in total exports with 1.7 million jobs attributed to trade with other countries equaling over $53 billion in total export. The National Association of Manufacturers sites that manufactures in Illinois account for nearly 16 percent of the total output in the state, employing 12.6 percent of the workforce. Manufacturing accounts for 93 percent of Illinois’s exports in 2010. Since 2003, Illinois manufacturing exports grew at 83 percent while the national average was a 70 percent increase. Small businesses comprise 90 percent of Illinois’s 16,902 exports and small businesses account for 22 percent of total state exports.
Positive Impact of Free Trade Agreement with Colombia (18th District and Illinois)
Currently, more than 99 percent of total exports from Colombia enter the United States duty-free. With the passage of the trade agreement more than 80 percent of U.S. exports to Colombia would become duty-free immediately. With remaining tariffs phased out over 10 years.
Congressman Schock founded the Colombia Caucus in the House of Representatives last year, which has been actively promoting the U.S. – Colombia Trade Promotion Agreement. Additionally, he visited Colombia in 2009 and met with Colombian President Alberto Uribe. Schock also recently met with new Colombian Vice President, and former labor leader, Angelino Garzon to discuss passage of the pending trade agreement. Congressman Schock will soon be introducing a resolution along with his Democrat colleagues calling on the President to formally submit the U.S. – Colombia Trade Promotions Agreement to Congress by July 1st for Congressional consideration.
Positive Impact of Free Trade Agreement with Panama
In 2010, six of Caterpillar’s top ten export markets were in Latin America; last year Caterpillar exported nearly seven times more products to Colombia than Korea. This was more than the exports to Japan, India or Germany. 92 percent of large mining trucks shipped from Decatur, IL are exported; 82 percent of large track type tractors shipped from East Peoria are exported. Caterpillar saw a 58 percent increase in sales to Latin America last year, which is larger than any other market in the world. 15,807 companies exported goods from Illinois in 2007. Of those, 89% are small and medium-sized companies which generate nearly 1/5 of Illinois total merchandise exports. 7.1 percent of total private sector employment in Illinois is linked to export supported manufacturing jobs, and 25 percent of all manufacturing jobs in Illinois depend on exports. Illinois’ share of exports to Colombia totaled over $270 million in 2009. Colombia has traditionally been one of the top ten export markets for U.S. corn, and during 2007-08, the U.S. exported 114 million bushels of corn to Colombia, with an estimated value of almost $500 million. In 2001, 60 percent of Colombian wheat that was consumed was American wheat. Today, just under 20 percent of the wheat that Colombians consume is American wheat.
Positive Impact of Free Trade Agreement with Panama (18th District and Illinois)
Currently Panamanian exporters to the United States generally enjoy duty-free treatment while U.S. exporters face tariffs in Panama from 5 to 35 percent. The agreement would correct the imbalance. Over 87 percent of U.S. exports of consumer and industrial products to Panama would become duty-free immediately, with remaining tariffs phased out over 10 years. According to the American Farm Bureau Federation, Illinois’s exports of agricultural products to Panama are estimated to increase by more than $2.4 million per year. Under the agreement, the increase will largely be attributed to gains in exports of corn and soybeans. The expansion of the Panama Canal will offer expanded manufacturing opportunities for Central Illinois businesses once the trade pact is signed and is implemented.
Positive Impact of Free Trade Agreement with South Korea (18th District and Illinois)
Currently the average South Korean tariff for U.S. exporters is more than four times the average tariff that South Korean products face in the U.S. market. With the implementation of this agreement, South Korean tariffs on U.S. products would be slashed. Immediately, 80 percent would be zero upon full implementation and 92 percent would be zero within five years. Virtually all tariffs would be zero within 10 years. The U.S. Business roundtable estimates that the Korea FTA alone would create 208 jobs inside the 18th district of Illinois. The American Farm Bureau Federation estimates that Illinois would see an increased export of soybeans to Korea estimated at $10.2 million per year. Currently, Soybeans are Illinois’s second largest source of farm cash receipts.
Additional Background on Pending Free Trade Agreements
• Trade is vital to U.S. economic success. About 42 percent of all U.S. jobs are connected to international trade including 3 million manufacturing jobs and 3.9 million agricultural jobs.
• Trade Agreements reduce tariffs on imports. Tariffs are a tax on U.S. consumers. Trade has lowered prices and increased the purchasing power of an average American family of four by $10,000 dollars.
• Trade aids small and medium size businesses, creating jobs. Passing the pending trade agreements would have direct benefits for small and medium businesses and the jobs they create. In 2008, more than 80 percent of exporters to each of the three marks were small and medium sized enterprises. They exported $12 billion worth of goods and services to Colombia, Panama, and South Korea.
• Failure to implement agreements slows growth. Failure to implement the pending trade agreements risks putting U.S. exporters at a competitive disadvantage in these markets, costing American jobs and slowing job creation. Our failure to act risks losing market share in Colombia, Panama, and South Korea to foreign competitors and falling further behind. The European Union for example has already ratified 25 agreements and has an additional 26 in the works. NOTE: Unless otherwise noted, figures above are courtesy of the Ways and Means Committee
Final Steps to Passage of the Pending Free Trade Agreements
• Formal Submission to Congress - The Administration formally sends to Congress the implementing bills, the trade agreements, Statement of Administrative Action and other statutorily-required reports.
• Bill Introduction - The Majority and Minority Leaders of each body (or their designees) introduce the implementing bill “by request” as legislation in the House and Senate on the same day as it is sent-up by the President.